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Pact between Lunenburg, solar field developer falls through

By Katina Caraganis , kcaraganis@sentinelandenterprise.com

Updated:
02/16/2013 06:34:41 AM EST

LUNENBURG -- A deal between the town and a Florida-based developer looking to sell net metering credits generated by a solar field in town has apparently fallen apart, after the developer and town could not agree to a change in the price of the credits.

Scott Fenton, a Worcester attorney representing MASS PV1, told selectmen in November that part of the parcel is zoned commercial and part is zoned residential and his client would build a half-megawatt facility on a commercially zoned property on Chase Road. Selectmen agreed to purchase the credits on that project.

When a meter is on a house or business, it spins one way and shows a home or business owner how much power they have used in their facility, which is reflected on how much they pay on their bills. However, with a solar project like this, the meter spins in the opposite direction, generating credits that can be applied to a utility bill.

The company would still develop the project on the residential land and the town had until Feb. 13 to decide if it wanted to purchase those credits. If not, they could be sold to other Unitil communities in Massachusetts.

The initial proposal, which was approved at Town Meeting last spring, listed the purchase price of the credits at 9 cents, but the developer has since told the town the price has nearly doubled.

Town Manager Kerry Speidel said that on Feb. 7, Fenton notified the town that the developer was no longer willing to sell the credits at the previously specified price of 9 cents per kilowatt hour and that he would be providing another offer.

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A new offer was presented to the town, through Speidel, Monday, and included an offer to buy the credits at 15 cents. Speidel said it was clarified that the new price would be for anything over half a megawatt and the developer said how much each credit is worth and can be applied to a utility bill has increased by 2 cents per kilowatt hour.

"After much back and forth, I directed town counsel to advise MASS PV1 that we were willing to purchase 100 percent at the original price of $0.09. If that was not possible, then we would only be purchasing the 500 KW at $0.09," Speidel wrote in a memo to selectmen that she gave them at Tuesday's selectmen's meeting.

Her memo said that Fenton advised counsel that unless the town was willing to purchase 100 percent of the credits at the new rate, there would no deal.

Speidel said Thursday afternoon that she was made aware by Fenton that if the town wanted to purchase any of the credits, including the original half a megawatt, it would be at the new escalated price.

"It's unfortunate. We were interested in their project because they were offering to sell the credits at 9 cents. That was the deal taken to Town Meeting. This has all gone through a public process, so it would be hard for them to argue it," she said.

She said she has notified the developer the town is no longer interested in purchasing any credits at the new price because it no longer makes financial sense.

"The market has changed. Those are the numbers we're getting in. It would still be a $200,000 savings. That is still substantial," Fenton said.

Speidel said it was interesting to hear that Fenton is alleging the town has made no attempts to keep the lines of communication open.

"For him to say the town is not responding is very interesting. We've incurred legal costs," she said. "They seem to have forgotten to make that offer of the 90 days to think about the additional credits. The town didn't ask for that, they offered it."

She said it appears that the developer doesn't remember ever offering the 90 days, while Fenton said he had a different interpretation of what those 90 days meant.

"We were under the assumption when they offered the 90 days, we actually had them. They wanted us to buy all the credits and then resell. They didn't want to have to sell to multiple people. They wanted to sell to one entity," she said.

Reached by phone Thursday, Fenton said the market has changed considerably, which is why the price has changed.

However, Speidel said she believes the price increased to create a bidding war.

Because the developer has already received a special permit to build the project, it can still be done on the property, and the amount of property taxes paid to the town is yet to be determined. Because a power purchase agreement will no longer be executed, there will be no payment in lieu of taxes to the town.

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